* Oil trades below $124 as U.S. demand seen deteriorating
* ANZ Bank stock plummets after $1.1 bln write-down
* Equity capital flows returns to Asia Pacific in week -
EPFR
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(Updates prices, adds European outlook and quote)
By Kevin Plumberg
HONG KONG, July 28 (Reuters) - The U.S. dollar rose to a
one-month high against the yen on Monday on easing fears about
the world's largest economy, and Asian stocks were mixed as
financial sector uncertainty lingered ahead of a slew of
company earnings.
European stocks were expected to open slightly lower, down
between 0.1 percent and 0.4 percent, according to financial
bookmakers.
Oil prices below $124 a barrel <CLc1> provided some comfort
on global economic growth prospects, but a profit warning from
Australia's third-biggest bank, which forecast more than $1
billion in write-downs, cast a pall on the region.
[]
Japan's Nikkei share average <> edged up 0.1 percent
after U.S. economic data spurred hopes for the country's
enfeebled export sector.
However, Honda Motor Co shares <7267.T> fell 2.9 percent
and slowed the index's advance after the auto maker cut its
annual earnings outlook on Friday, leaving investors uneasy
ahead of results this week from Sony Corp <6758.T>, Nintendo Co
Ltd <7974.OS>, Sumitomo Mitsui Financial Group <8316.T> and
Mizuho Financial Group <8411.T>.
"Solid moves in U.S. stocks and a softer yen are supporting
the market, but investors are finding it difficult to buy due
to a large amount of uncertainty," said Yutaka Miura, deputy
manager of the equity information department at Shinko
Securities in Tokyo.
Outside Japan, shares in Asia-Pacific were down 0.2 percent
after hitting a three-week high last week, according to an MSCI
index <.MIAPJ0000PUS>.
Australia's benchmark S&P/ASX 200 index <> slid 0.8
percent, led by Australia and New Zealand Banking Group
<ANZ.AX>, whose shares dropped 9.4 percent after it said its
annual earnings per share would likely fall as much as 25
percent because of costs associated with bad loans.
Hong Kong's Hang Seng <> rose 0.3 percent, with gains
in CNOOC Ltd <0883.HK> and Sinopec Corp <0386.HK> curbed by a
decline in HSBC <0005.HK>. Taiwan's markets were closed due to
a typhoon.
JPMorgan asset allocation strategists warned global equity
markets could come under renewed pressure before the summer is
over after the relief rally fades and the economic reality that
the euro zone, Japan and Britain are on the brink of recessions
sinks in.
"Stocks are getting support from U.S. earnings that are
coming in better than expected outside of cars and banks, and
the record number of underweight positions. This will likely
nudge major indices up in coming weeks, just as happened in the
January and April reporting season, but the rally will then
probably peter out from mid-August on, as attention focuses
again on economic risks," they said in a weekly note sent to
clients.
SLIGHTLY HUNGRIER FOR RISK
The U.S. dollar was trading relatively unchanged against
the yen at 107.70 yen after earlier climbing to the highest in
a month, above 108 yen <JPY=>. It was bolstered by data showing
U.S. consumer sentiment bounced from a 28-year low, a surprise
rise in business investment and new home sales that were not as
weak as expected.
The euro was steady at $1.5695 <EUR=>.
Some evidence began to show that investors may be gaining
enough confidence to take more risks.
Last week, when oil prices logged the largest decline since
December 2004, investors pulled money out of defensive choices
and took a chance on some beat-down areas.
For example, Asia ex-Japan equity funds had the first week
of positive flows since mid-May and for global emerging market
funds in more than seven months, said EPFR Global, a
Boston-based research firm.
In terms of global sectors, investors sold the commodity,
financial, real estate and consumer goods sectors and put money
into the healthcare/biotechnology, energy and technology
sectors, said EPFR, which tracks $10 trillion in assets.
The benchmark 10-year Japanese government bond yield
<JP10YTN=JBTC>, which moves inversely to the price, slipped 1
basis point to 1.565 percent, though volume was relatively
light ahead of U.S. and Japanese economic data releases this
week.
(Additional reporting by Aiko Hayashi in TOKYO; Editing by
Lincoln Feast)
